New Delhi, Apr 28: In a huge development related to the global energy, the United Arab Emirates (UAE) today announced that it will exit major oil producer groups OPEC and OPEC+ with effect from May 1.
The sudden announcement assumes a massive significance as it comes amidst the increasing energy crisis globally in the wake of conflict in West Asia involving the US, Israel and Iran.
OPEC or the Organisation of the Petroleum Exporting Countries is a 12-nation grouping which collectively regulates production and supply of petroleum products across the world in order to maximise profit.
“This decision reflects the UAE’s long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production, and reinforces its commitment to a responsible, reliable, and forward-looking role in global energy markets,” said the announcement via its state-run WAM news agency.
The UAE has been one of the most influential and long-associated members of OPEC and its sudden departure is being seen as a major setback for the group, especially at a moment when the global economy is reeling from severe supply disruptions and volatility.
OPEC unity hit:
The sudden departure of UAE from OPEC is being seen as a major setback for the group, especially at a moment when the global economy is reeling from severe supply disruptions and volatility.
The bloc, which has historically projected unity despite differences over geopolitical issues and production limits, now faces the risk of growing internal strain.
The departure of the United Arab Emirates is likely to unsettle the group and weaken its collective strength.
At the same time, Gulf producers within OPEC are grappling with serious logistical challenges.
Oil shipments through the Strait of Hormuz, a critical global transit route between Iran and Oman that carries nearly one-fifth of the world’s crude and LNG supplies, have been disrupted due to Iranian threats and attacks on vessels.
About OPEC and OPEC+
OPEC was founded on September 14, 1960, in Baghdad by the first five members: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.
The organisation currently comprises 12 member countries.
OPEC+ consists of 22 to 23 countries in total, comprising the 12 core OPEC member nations and 10-11 non-OPEC oil-producing allies, including Russia.
This alliance, formed in 2016, aims to regulate global oil supply and prices.
